Embotics Raises $8.4M for Cloud Management

Embotics, a software company that provides tools to deploy and manage private clouds, has closed on $8.4 million in equity financing, the company said today.

The round includes $2.5 million from VentureLink LP and $2.5 million from Covington Fund II Inc., with the remainder coming from other private investors. Embotics will use the funding to accelerate global sales and marketing efforts as well as to hire more software engineers. With this funding round, Embotics’ total financing-to-date is $18 million.

“We are focused on the cloud management software market and we are growing,” said Embotics’ CEO Jay Litkey, adding that revenues have tripled in the last 12 months. “With our software solution, mid- or large-size organizations and mid-tier service providers can deploy private cloud in their data center in an hour.”

Private clouds, which are deployed for a single organization, offer the scalability, elasticity and agility of a public cloud without some of the security risk. Private clouds are often the first stop on the journey of companies (and organizations within companies) toward cloud architecture and an IT service model. A survey of 2,500 attendees at Gartner's 2011 Data Center Conference in December found that 78 percent of those present said they plan to build private cloud services by 2014.

Private Cloud Gaining Ground

The growing interest in the private cloud marketplace is also leading to growing investment in cloud management. "Taking the complexity out of it is our approach," Litkey said. "The investors voted with their wallets and they agree with us." Piston Cloud Computing has venture backing, as does public, private and hybrid cloud management firm, Joyent.

“It's an evolving market. Private cloud is what the market needs today,” Litkey said. Embotics is headquartered in Ottawa and has offices in the U.S. and Europe, and has seen strong sales growth since its founding in 2006.

Embotics’ flagship product, Embotics V-Commander, is a product that has multiple functions that are integrated, giving customers the infrastructure “in a box” solution. Once deployed, it continuously monitors the virtual data center to optimize the automation, deployment and configuration of IT services. “Our product does automation, provisioning and integrating charge back, and performance monitoring,” he said.

Litkey said EMbotics offers less of a learning curve to deploythan VMware, and is also more affordable to maintain. “VMWare has a high hurdle for organizations in cost and complexity, with the total cost of ownership,” he said. “With VMWare, you are not just paying for it the day you bring it in.”

Test-Drive the Cloud

Embotics if targeting a different level of purchaser of their product. “IT executives have cloud fatigue,” Litkey said. “Every vendor on the planet is saying that they are ‘cloud.’ So the executives are delegating down to the more technical staff, the technical buyer. The technical buyer likes to check things out. So we are enabling that.” On its website, Embotics offers live online demos and evaluation copies for technical buyers to download and test drive before engaging in a sales process.

“Fast, easy and affordable” is the CEO’s mantra. This aspect of the product appeals to a number of customers such as service providers or software companies with their own development and testing labs who are seeking agility in deploying and running their private clouds.

This round of financing occurs after Embotics’ most successful year to date, according to the company.  They reported 300 percent growth in sales over the past year, 220 percent year-on-year growth in new customers, which now includes Bell, Deloitte, Cisco, CSC, Dutch Ministry of Defence, MITRE and numerous universities and public sector departments. In addition, Embotics has signed new channel partnerships, including Magirus in Europe.

“This financing will enable us to match that opportunity with clearly defined differentiation, corresponding sales and an increased engineering team to support new and existing customer opportunities,” Litkey said.